This bill establishes thresholds and limits for the spending of students' federal aid funds by for-profit higher education institutions. It also prohibits these institutions from (1) advising students in certain ways about borrowing funds to finance their higher education, (2) offering unaccredited programs in fields that require accreditation for licensure, and (3) enrolling students with criminal convictions in programs for fields that bar such individuals from employment.

EFFECTIVE DATE: July 1, 2017

INSTITUTIONAL SPENDING OF FEDERAL STUDENT AID

The bill prohibits for-profit higher education institutions from spending (1) less than 50% of all federal Pell grant awards and federal student loan dollars received from tuition revenues on student instruction and (2) more than 15% of all such tuition revenues on institutional advertising.

STUDENT FINANCIAL ADVISEMENT

The bill also prohibits for-profit higher education institutions from advising students in certain ways about borrowing. Specifically, it bars these institutions from (1) discouraging any student from borrowing from a lender of their choice, (2) advising any student to borrow private loans before exhausting all federal loan options, and (3) advising any student to borrow from an institutional lender when the institution reasonably knows such student will be unable to meet the obligations of the loan agreement.